Related News Opinion From The Old World

Procter & Gamble’s vice chairman of global beauty and grooming Ed Shirley recently told staff that the company was going tore-orientate its beauty business by gender, according to The Wall Street Journal.

“Our principal beauty focus has been winning with women, yet we’re not broadly serving male consumers’ needs outside of Gillette and fine fragrances,” according to the article. The new structure takes effect this month.

P&G is making new moves in the men’s grooming market that could result in a paradigm shift in the beauty industry and spawn a whole new range of men’s products.

The phrase “paradigm shift” tends to be over-used sometimes, but on this occasion we feel it may well be justified. For too long, most beauty companies have been organized around product categories; e.g., makeup, skin care, hair care, which in turn has tended to generate female brands, in line with immediate volume potential. In many cases, male variants have merely been considered as incremental SKUs, with black packs and heavier fragrances their only concession to target users.

We think that, like so many P&G initiatives, this move is likely to bring about a paradigm shift in beauty industry thinking generally, and spawn a whole new range of men’s products. And that with it, will come some much needed growth.

There will be winners and losers, with P&G undoubtedly taking the high ground. Interestingly, this has probably been ceded to P&G by Unilever’s Axe, which has singularly failed to extend into shaving and skin care. The company should have bought Edge years ago and rebranded it as Axe—the black variants even look like Axe—thereby making it more sexy, whilst extending the brand’s depth of usership. Instead, Energizer has added Edge to its Schick portfolio.

There will be opportunities for new players, too, in the male grooming sector...lots to go for…watch this space…

Salon Quality for All

Imitation is said to be the sincerest form of flattery, so the folks at Alberto-Culver must be wearing a wry smile at how their success with Tresemmé in the UK and Spain is being copied by none other than the mighty L'Oréal in France, not to mention Henkel as well. Tresemmé’s formula of selling large packs at low prices, reinforced by advertising which gives the brand a salon positioning, has been ringing the bell in these recessionary times, although the brand is not yet in all European countries, France being a notable exception.

Franck Provost promises “Salon quality at budget prices.”

So L'Oréal has recently signed up a third French hairdresser, Franck Provost, to add to its licensing agreements with Jacques Dessanges and Jean-Louis David. Except that in Franck Provost’s case, the new mass market SKUs are to be in 750ml size for €6.99, compared with Fructis at 200ml for €3.05 (for the benefit of our North American readers, 750ml really is a large size for shampoo in Europe, where the average is nearer 200ml). Not to be outdone, Henkel’s French subsidiary has come out with a new, budget priced 500ml size for its strangely named Saint Algue Syoss shampoo brand, with the ubiquitous slogan “Salon quality available to all.”

In the U.S., of course, salon quality covers a very wide pricing spectrum, from diverted professional lines to Kao’s John Frieda to Alberto-Culver’s Tresemmé. Given Kao’s need for critical mass in hair care in the States, and Alberto’s in markets overseas, one has to wonder whether there is a deal to be struck somewhere along the line.

Prestige Retailers in France

For those high-class U.S. brands brave enough to consider tackling Europe's No. 1 prestige market, France, here are the main retailers you'll need to convince—in order of importance (see chart below).

The strategic point arising from these figures should not be lost on U.S. owners of prestige brands, namely the predominance of perfumery chains in France, as opposed to department stores…signs of things to come, perhaps?

Ethnic Concept Stores in Paris

An interesting development in French perfumeries has been the recent opening of a new, relatively up-market ethnic perfumery in the Paris suburb of Saint-Denis, called Inaya. Although we have not visited it yet, photos and the PR output look eye-catching and different. The store is the brainchild of three joint founders, who have extensive experience in the beauty business. One of them, Valerie Bakala, is quoted as saying “We don’t want to be seen as being too narrow. Our clientele at the moment consists of 25-35 year old women used to shopping in self-service perfumeries, half of whom tend to be Caucasian.”

Tough times ahead for brands that make extravagant claims?

In terms of lines stocked, for example, only 5 out of 15 makeup brands are specialist ones for ethnic skin. The concept store has two makeup “cabins” where clients can get facials and there is a nail bar and a special space for free consultations.

While Inaya is not the first such ethnic beauty store in Paris, it does seem set to break new ground with its up-market positioning and generally thoughtful approach. It is worth watching…

Rationalization in Pharmacies

As our regular readers know, chain pharmacy is generally not allowed by law in continental Europe, except in Norway and The Netherlands. But there are signs that things are changing, albeit more slowly than some had predicted due to the recession. While the implications are more significant for makers of medicinal products than cosmetics and toiletries, pharmacies across Europe do account for between 2 and 3% of cosmetics and toiletries, except in France where the figure tends to be higher for historic reasons.

In most of these independents, one can invariably find local brands of skin care, which have only survived because of retailer inertia. But come chain ownership, and many of these little local brands are likely to find themselves facing the prospect of rationalization and tough times ahead.

Italy is a good case in point; there are any number of pharmacy-only “slimming” skin care brands with extravagant claims to match.

One which particularly caught our eye was for a brand called Rilastil, whose ad we show above. One of the Relastil SKUs is a special “Lipofusion” candle, whose claim on its website says “Studies show that while burning the Rilastil aromatherapy candle for 10 minutes, adipose (fat) tissues metabolize for up to an additional 90 minutes!”

Hey, that’s good value then, since the same website says the candle burns for 35 hours!

Sara Lee Update

In our last column (http://www.happi.com/articles/2009/05/news-opinion-from-the-old-world), we stuck our necks out and said that we thought Goldman Sachs were unlikely to get lucky on the sale of Sara Lee’s European household and toiletries portfolio, at least not for the $2 billion price tag which was being spun in the financial press. We argued that Sara Lee had never really grasped the nettle and rationalized its diverse local offerings into a coherent series of pan-European brands. If someone else was going to do this for them, it was unlikely to be at much more than distressed sale prices.

Things may change, but at the time of writing scuttlebutt is that the sale process is not going well, buyers are not coming forward and the company may have to rethink its sale plans. Meanwhile, we wonder what’s happening on shelf, in terms of potential distribution loss, which is always a risk when brands are put up for sale.